The performances of Shin Young, MDM Group, and DS Networks, the largest developers in the country, greatly diverged last year. Shin Young recorded an operating profit increase of over 40% compared to the previous year, marking an "earnings surprise." In contrast, MDM Group saw its operating profit decrease by more than 70%, and DS Networks turned to a deficit. The deterioration in the developers' operating performance is attributed to the inability to collect subscription payments on time due to unsold units at major business sites and increased interest costs from loans taken during the real estate development process.
According to the Financial Supervisory Service on the 16th, Shin Young reported an operating profit of 103.095 billion won last year, an increase of 40.3% from the previous year. Sales also rose by 24.7% from 78.201 billion won the previous year to 97.537 billion won. A Shin Young official noted, "Last year, we successfully completed the sales of the officetel 'Brighton Hannam' in the Yongsan District of Seoul and the apartment complex 'Shin Young Z-Well Unjeong City' in Paju Unjeong New Town, and we collected the subscription payments. The successful sales at major business sites led to the increase in operating profit and sales."
MDM Group's operating profit last year was 122.719 billion won, a 74% decrease from the previous year (472.099 billion won). Sales also dropped from 88.148 billion won to 31.132 billion won, falling to less than half of the previous year. However, the operating profit of MDM Plus, a subsidiary of MDM Group, increased by 67%, rising from 9.215 billion won the previous year to 15.431 billion won.
A representative from MDM Group stated, "Every year, MDM Group and MDM Plus's sales and operating profit fluctuate according to various conditions such as permits for development projects and sales status. Last year, MDM Plus’s operating profit increased."
DS Networks turned to a deficit last year. In 2023, it generated an operating profit of 46.9 billion won, but last year it recorded an operating loss of 106.664 billion won. It is reported that unsold units at some local business sites affected performance. DS Networks is currently developing a multi-family housing project on the site of the Yudal Stadium in Mokpo, Jeollanam-do, for which it borrowed 120 billion won long-term. Currently, the occupancy rate of a mixed-use development in Daegu's Gamsam-dong that is 64.8% completed has only reached 51.15%, resulting in a loss of 15.312 billion won. The mixed-use development in Gildong, Gangdong District, Seoul, also saw an occupancy rate of 82.16%, leading to a loss of 27.574 billion won.
A representative from DS Networks explained, "In projects like those in Mokpo, where local residents have high expectations, we are pushing forward with the commitment to complete the project. We plan to focus on measures to improve profitability, including the sale of some land and the handling of interest-related expenses for managerial efficiency."
Kim Seung-bae, chairman of the Korea Real Estate Development Association (Fides Development), said, "Although the development and construction industry is facing difficulties recently, the market is expected to recover from the second half of this year, leading to improved profitability. In particular, I expect the new government to focus its policy capabilities on the recovery of the real estate market, playing a role in the market's recovery."